This article is part of the On Tech newsletter. Here is a collection of past columns.
An esteemed 150 million Americans are members of Amazon Prime’s shopping club, making it one of the most popular paid technology services in the United States. Most Americans are members, and many can’t imagine giving up the ability to order things on a whim and have them delivered quickly and at no additional cost.
Here’s a question for you stubborn: Would you stick with Prime at all costs?
I ask because some of the financial experts who follow Amazon have speculated that the company might raise the price of a U.S. Prime membership soon.
Prime’s recent US cost hike was about four years agowhen the price rose from $ 99 to $ 119 for most people who pay annually. The previous Prime price hike was four years earlierwhich means it may be time for another bump. (Amazon didn’t say one or the other, and its PR department didn’t respond to my questions on Tuesday.)
People walk away from some products when prices go up, but it seems almost no one is leaving Prime. Among Americans who have been Prime members for at least two years, nearly 98 percent of them keep renewing, according to data Consumer Intelligence Research Partner or CIRP, which asks people about brands and investors.
Prime is one of the toughest consumer goods in the United States. It seems to defy our price-conscious tendencies. And Prime is yet another example of the power Amazon and America’s other tech giants have to rewire our brains.
Perhaps the (or least?) Most surprising behavior among Prime members: Michael R. Levin and Josh Lowitz, the co-founders of CIRP, told me that they believed that some people were still ordering more from Amazon when the Prime prices hit rose. This trend could be explained by the need to make more expensive membership seem worth the money. (You may also work out more if the cost of your gym membership goes up.)
But even Prime is not completely immune to the effects of higher prices. Levin and Lowitz say that if Amazon increases the cost of Prime, some people will move to alternatives like Walmart’s shopping club. They also said that Americans who paid Prime monthly memberships tended to stop and restart more often than people who bought Prime yearly memberships.
Prime was a project Jeff Bezos said was a controversial idea on Amazon when it started in 2005. Amazon’s money nerds were appalled at the shipping costs the company incurred from early Prime members who bought and often ordered relatively cheap items.
Over time, the service has proven useful to Americans – and to Amazon. Perhaps more than any single decision by the company, Prime has captivated Americans on Amazon.
Shipping still costs Amazon a fortune, but Prime members usually only buy online from Amazon. An analysis by Morgan Stanley last year estimated that households that are Prime members typically spend more than $ 3,000 a year on Amazon. Those who weren’t part of Prime were spending half as much on Amazon.
Prime is one of the ways Amazon has bent America at its will. Another example: When Amazon said in 2019 that it would start moving the standard delivery time for US Prime members from two days to one, Americans began ordering immediate supplies like phone chargers from Amazon instead of going to the store, company executives said. This change in behavior by millions of Americans was felt almost immediately in Amazon’s sales.
I talk a lot in this newsletter about the need to understand the impact that technology company decisions have on us and our world. Facebook’s tinkering with its software has led political parties to choose make their campaign messages more negative and prompted more Americans are signing up to vote. Apple’s way of generating revenue from apps has dictates the digital services available to us, and we don’t know if an alternate reality would be better.
The Americans have shown that they are attached to Prime. We will see if a possible price change affects this.
Tomorrow I’ll declare my own shopping secret: I’ve quit Prime.
We want to hear from our readers about their use of Prime. Please let us know in the comments why or not you have a Prime subscription; If you have one, tell us if you’d be willing to pay more for it. We may publish a selection of responses in an upcoming newsletter.
Before we go …
Antitrust proceedings against Facebook are in progress: A U.S. federal judge said: Government could go on with the part of its lawsuit alleging that the company had a monopoly on social media and that it had abused its power by buying young competitors like Instagram, writes my colleague Cecilia Kang.
Related: This lawsuit is about Facebook’s past, tech writer Casey Newton says. Government watchdogs questioning Facebook’s acquisitions of virtual reality companies could hurt the company’s future.
This is where the imitators come (and go): Several people have developed apps that almost exact copies from Wordle, the suddenly popular Online puzzle game. Apple seems to have kicked out these copycats of its app store, reports The Verge.
How to succeed on TikTok by being weird: Protocol writes about the runaway TikTok videos from the language learning company Duolingo and why some companies are doing it embrace TikTok’s vibe of stupidity. (You’re welcome email me Your favorite oddball brand accounts on TikTok!)
“Sleety Pie.” “Frostbite Glove.” “Clear Ctrl Salt.” These are some of the the names of the snow plows operated by the Michigan Department of Transportation. (Thanks to my colleague Erin McCann for tweet This.)
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